GAMING: Sands China rises to record after earnings beat estimate

2013-10-21

From：Macau Daily Times

Sands China Ltd. surged to a record in Hong Kong after reporting third-quarter earnings that beat analyst estimates as its new resort drew more gamblers.
The Macau casino operator shares have climbed 71 percent this year, compared with a 3 percent gain for the city’s benchmark Hang Seng Index.
Sands China, Galaxy Entertainment Group Ltd. and Melco Crown Entertainment Ltd. have been expanding on Cotai. Sands Cotai Central, the operator’s latest resort which opened in April last year, has added shops, entertainment shows and hotel rooms to attract middle-class gamblers to the world’s largest casino hub.
“Sands has been very strong, especially on the mass-market segment,” Grant Govertsen, a Macau-based analyst at Union Gaming Group, said. “The company has the biggest footprint in non-gaming entertainment which helps to draw a lot of family holiday-makers.”
Adjusted property earnings before interest, taxes, depreciation and amortization increased 62 percent to USD785.3 million in the third quarter, the company said in a stock exchange statement. That compares with an average estimate of USD732 million from 10 analysts compiled by Bloomberg.
“The sector is on fire again,” Govertsen said. “Even the second or third-tier Macau related stocks are enjoying the strong momentum.”
Neptune Group Ltd. and Success Universe Group Ltd., which have investments in the gaming and cruise ship businesses, surged 17 percent and 8 percent, respectively. MGM China Holdings Ltd. climbed 4.2 percent and Galaxy Entertainment rose 4.1 percent.
Sands China has more than 9,000 hotel rooms and about 40 percent of Macau’s four and five-star offerings, according to Deutsche Bank AG estimates. “Its massive room inventory gives it an unparalleled strategic advantage in Macau,” Karen Tang, a Hong Kong-based analyst at Deutsche Bank, wrote in a note published Friday, raising the company’s target price to HKD65 from HKD53.1, while keeping a “buy” rating.
Net income for the Hong Kong-listed unit of Las Vegas Sands Corp. rose 89 percent to USD617.9 million from USD326.7 million a year earlier, according to its parent’s filing in U.S. GAAP standard. Revenue climbed 43 percent to USD2.34 billion. Parent Las Vegas Sands also reported earnings above estimates.
The company plans to invest another USD2.8 billion to build a new Macau resort, to be named the Parisian, which will have a replica of the Eiffel Tower. Gambling revenue in Macau gained 17 percent to 260.6 billion patacas (USD33 billion) in the first nine months of this year, after raking in USD38 billion in 2012. Bloomberg

Copyright@Macau Daily Times